FX is short for ‘forex’, which in turn is short for ‘foreign exchange’ – it refers to trading currencies, i.e. forex pairs.
The forex trading market is the largest and most liquid market in the world, with a daily turnover of $6,595 billion (statista.com, 2021).
What does it mean to trade currencies?
Trading currencies is the speculation on one currency moving in value against another currency. Traders basically buy one currency while selling another, and trying to close the position with a profit at a later point.
Some participants in the forex market use the market to hedge their currency exposure, i.e. protect themselves against fluctuations in currency exchange rates.
We recommend using a demo account if you’re about to explore how to start forex trading. Using a demo account can be the best way to learn forex trading. You can also read more about some of the top forex trading strategies used by forex traders.
See also our practical breakdown of forex trading examples, and see some of the top forex trading strategies. You can also learn industry terms using our forex trading glossary.
Further reading
- Forex trading explained
- Bid-ask spread - Learn what it is and why it is important
- Lowest Spread Forex Brokers in 2024 | BrokerChooser
- How to start forex trading
- Forex trading examples
- What is forex trading about?
- Forex trading hours
- Forex trading glossary
- Forex trading in India
- Forex pips explained: learn the meaning of pips and pip calculation in no time
- Forex lots explained: learn lot sizing and calculation in no time
- Forex trading for beginners: learn the basics
- Leverage explained: learn what it means and how it's used
- What is volatility in forex?
- Forex margin: learn how margin works and how to calculate it
- What is a currency option?
- What is a currency future?
